(Yicai) Feb. 10 -- A monthly gauge of sentiment on China's economy compiled by Yicai remains above the boom-bust line for the seventh consecutive month in February, as a series of growth-stabilizing measures rolled out by the government at the end of last year take effect.

The Yicai Chief Economists Confidence Index came in at 50.2 for this month, according to a survey of 13 leading China-based chief economists. The index stood at 50.3 last month and 50 in December.

With continued policy support, economic growth will likely quicken over the coming months, said Cai Wei, chief economist at KPMG China Advisory. At the year’s start, close attention should be paid to the intensity of fiscal policy, the effectiveness of monetary policy transmission, and the actual impact of consumption stimulus policies on the economy, Cai added.

Since the beginning of 2026, measures to expand domestic demand have been actively implemented, with a clear intention to take early action, Cai pointed out. These include a CNY500 billion (USD72.3 billion) policy-based financial instrument and CNY500 billion in outstanding local government special bonds projects, Cai said.

Coupled with a cluster of property, fiscal, and financial support measures also issued at the start of the year, these actions are likely to support investment and consumption, Cai stressed.

In addition, the photovoltaic, battery, and other sectors face changes to export value-added tax refund policies in the second and third quarters, so companies may concentrate their exports in this quarter to avoid the cost of those changes, Cai noted, adding that this is expected to lift economic growth at the year’s start.

Annual Targets

To achieve China’s goal of “doubling economic output and per-capita income by 2035” while bearing in mind actual economic growth over the past three years and the future direction of economic policy, the National People's Congress will likely set annual targets in March for around 5 percent economic growth, about 4 percent for the deficit-to-gross domestic product ratio, and about 2 percent for consumer inflation.

Consumer spending is expected to contribute about 55 percent of China’s GDP expansion this year, lifting headline growth by roughly 2.75 percentage points, said Lian Ping, dean of the research institute jointly formed by Guangzhou Development District Holding Group and the China Chief Economist Forum. 

Investment is forecast to account for 25 percent of economic growth, adding around 1.25 point, while net exports of goods and services are expected to contribute the remaining 20 percent, or about 1 point, he said.

Keeping the deficit-to-GDP ratio at around 4 percent would signal strong support for the economic recovery while providing room for fiscal sustainability, noted Cheng Shi, chief economist at Industrial and Commercial Bank of China International.

The consumer price index has turned higher on a year-on-year basis since the end of 2025, pointing to a gradual recovery in demand, Cheng said. Setting the CPI target at 2 percent would allow economic policy to remain focused on expanding domestic demand while supporting a more moderate and durable rebound in prices, he added.

The chances are slim this month for a cut to the loan prime rate -- China’s benchmark lending rate -- or a reduction in the reserve requirement ratio -- the amount of cash banks must hold in reserve, Cheng said, though the central bank may still opt for an RRR or interest-rate cut later in the year if conditions warrant.

Editors: Tang Shihua, Martin Kadiev